Bitcoin ($BTC) is getting close to its all-time high, recently climbing past $68,000. This brings it within just 8% of its peak price of over $73,700, which it hit in March of this year.
As Bitcoin continues its upward trend, investors are paying close attention. Its growing influence in the crypto market is raising questions about what’s next for other cryptocurrencies, also called altcoins.
Bitcoin’s dominance in the market has also increased to 65%, a level last achieved during the bull run of 2021. Back then, Bitcoin attracted most of the investment before altcoins like Ethereum ($ETH) started to rise in mid-2021. Now, investors are wondering if a similar pattern will play out in this cycle.
Another important factor driving Bitcoin’s price is the upcoming US presidential election, which is just weeks away. Bitcoin continued its rise on Monday as investors closely watched election developments.
The Head of Research at FalconX, David Lawant, said, “For the first time, crypto has become a mainstream political issue, engaging a broader audience”.
The possibility of former president Donald Trump winning the election is seen as positive for Bitcoin. Trump has expressed strong support for cryptocurrency, including areas like Bitcoin mining and decentralised finance (DeFi).
While his opponent, Kamala Harris, also backs crypto policies, Trump’s history of pro-crypto views has boosted Bitcoin’s appeal to investors.
Technical signals point to a bullish Bitcoin
On top of these political factors, Bitcoin has also received positive signals from technical analysis. A key technical indicator, called the moving average convergence divergence (MACD) histogram, has turned bullish for the first time since April.
This indicator shows the strength of a trend, and its recent shift suggests that Bitcoin’s upward movement may continue.
Many believe this could lead to Bitcoin finally breaking through the $70,000 mark, something it has struggled to do in the past.
Bitcoin has gained nearly 30% since its September low of under $53,000, reaching as high as $69,500 during Monday’s trading in Asia. This recent price increase has encouraged investors who believe Bitcoin is on the verge of setting a new record.
The last time a similar MACD cross occurred was in October last year, just before Bitcoin broke through $30,000 and eventually hit its all-time high in March.
The growing interest in Bitcoin is also supported by strong inflows into spot Bitcoin exchange-traded funds (ETFs). Last week, these ETFs in the US saw net inflows of $2.13 billion, the highest since mid-March. This shows that institutional investors are backing Bitcoin, further boosting confidence in its future.
Wider crypto market benefits as Bitcoin leads
Bitcoin’s strong performance has lifted the entire cryptocurrency market as well. Ethereum, the second-largest cryptocurrency, has also seen gains, rising by 4% to pass the $2,700 mark.
Altcoins like ApeCoin ($APE) have experienced even more dramatic increases, with $APE’s price soaring over 60% after the launch of ApeChain, a new layer 3 blockchain developed by the ApeCoin DAO. This launch has also boosted $APE’s market volume, which jumped by nearly 3,000%.
Tokens in the artificial intelligence (AI) sector, like Bittensor ($TAO), have also benefited from the market rally, with $TAO rising 7%. The total market value of all cryptocurrencies has now reached $2.5 trillion, a 1% rise in just 24 hours.
In addition to Bitcoin’s rising price, the network’s security is also growing stronger. The Bitcoin hashrate, which measures the computing power securing the network, hit an all-time high of 769.8 exahashes per second (EH/s) in October.
This increase in hashrate, driven by advancements in mining hardware, suggests that the Bitcoin network is becoming more secure, although it also raises the cost of mining the cryptocurrency.
Investors seem confident in Bitcoin’s future, as shown by the rising trend of “HODLing” — the practice of holding onto Bitcoin for the long term. Data from Glassnode revealed that Bitcoin’s illiquid supply, or the amount of Bitcoin held by long-term investors, is at an all-time high.
Meanwhile, the number of Bitcoin reserves on centralised exchanges, which typically indicates selling pressure, has dropped to near all-time lows. This trend of holding assets in private wallets, rather than on exchanges, suggested that investors are betting on Bitcoin’s continued success in the coming months.
